Ukraine president agrees chemical plant sale -aide

KIEV, July 16 (Reuters) - Ukrainian President Viktor
Yushchenko has agreed to the privatisation of one of the
country's largest companies, a senior adviser said on Thursday,
after banning its sale three times over the past two years.

The government has been trying to sell the Odessa Port
chemical plant for years and on Wednesday set a minimum price of
4 billion hryvnias ($525 million) for an auction on Sept. 29. It
hopes to earn up to $1 billion.

Yushchenko, in a power struggle with Prime Minister Yulia
Tymoshenko for 18 months, last banned the sale in May 2008 on
the grounds that the plant was a strategic asset, giving the
buyer exclusive access to a key pipeline and port terminal.

"We talked to the government and we agreed that the Odessa
Port plant will be ... privatised," Oleksander Shlapak, the
president's chief economic advisor, told reporters.

"The new owner of the plant cannot receive a monopolistic
right to decide to whom he would give access to the pipeline to
the terminal and to whom not," he said. "This will remain under
government regulation."

Shlapak said Yushchenko agreed to the sale also because the
plant started to make losses this year, mainly due to a sharp
rise in the price of Russian gas, which it needs to produce
chemicals -- mostly fertilisers.

The government's stretched finances would benefit from any
new funds. Export and tax revenues have declined sharply as the
country faces a deep recession and billions need to be spent to
shore up the banking and energy sector.

The government has set conditions for the sale including
guarantees that the plant becomes profitable and investments of
1.3 billion hryvnias ($170 million) in the first five years.

The new owner would also be obliged to increase revenues
from the chemical plant to 3.02 billion hryvnias by the fifth
year of ownership from 2.34 billion hryvnias in the first year.

The plant had revenues of 3.6 billion hryvnias and profits
of 800 million hryvnias last year, against revenues of 2.3
billion hryvnias and profits of 310 million hryvnias in 2007.
(Reporting by Yuri Kulikov; writing by Sabina Zawadzki; editing
by Simon Jessop)

Related Articles

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:

Enrichthe conversation

Stay focused and on track. Only post material that’s relevant to the topic being discussed.

Be respectful. Even negative opinions can be framed positively and diplomatically.

Use standard writing style. Include punctuation and upper and lower cases.

NOTE: Spam and/or promotional messages and links within a comment will be removed

Avoid profanity, slander or personal attacks directed at an author or another user.

Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.

Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

I have read Investing.com's comments guidelines and agree to the terms described.

Disclaimer:Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Risk Disclosure:Fusion Media will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.